Non-Payment Advice Needed
Thread poster: Leah Hunt

Leah Hunt
United Kingdom
Local time: 22:27
German to English
May 22, 2013

Hi all

I'm pretty new to freelancing but thankfully so far I have only had one agency (based, as I am, in the UK if this helps) which will not pay.

I invoiced this company for four jobs, one of which was due to be paid at the end of March, the others at the end of April. When I didn't receive payment for the first job, I emailed the accounts manager and got no response. I then contacted the PM who told me that the accounts manager was on holiday but I'd be paid soon. I emailed both people a few further times but didn't receive any response. I tried calling them but the phone rang out each time.

A couple of weeks ago I put a review and non-payment alert on the company on the BB, which is still the only review on there. This would have been a warning sign if I'd have known about the BB when I signed up with them! I then emailed the company again advising I'd take further action if I wasn't paid immediately, but again no response.

I finally managed to get through on the phone today to the PM. He said that he "would love to" pay me but one of their main clients (not one I'd done work for) has gone bankrupt. I made the point I've seen on here a few times, that they should pay me the money owed regardless, but he did not respond. I couldn't get him to give me a firm date when they would pay despite numerous attempts and eventually gave up.

I did mention to him that I'd been investigating debt collection agencies. For this £165 debt, I've been quoted £40 if the agency pays, otherwise no fees.

Does anyone have any advice of any other roads to go down before getting a debt collector involved?

Thanks in advance for any advice!


 

John Fossey  Identity Verified
Canada
Local time: 15:27
Member (2008)
French to English
Debt collection May 22, 2013

When collecting bad debts you need to establish whether the client is a "can't pay" client or a "won't pay" client.

If the client is a "can't pay" client, meaning that they're so close to the wire that they literally have no funds available, you don't have much choice but to try to work out an agreement, such as a time payment. Applying more pressure in this case may not produce anything, if there's no money behind them. This is usually a very small client, such as another translator or very small company, which has no resources left and is themselves close to going out of business.

However, if the client is a "won't pay" client, with enough funds available to pay you but has chosen not to, you need to increase the pressure so you become their #1 priority for payment ahead of other creditors, which may include debt collection, etc.

Fortunately for you the amount is small - I think all of us have had the experience at one point and have thereby learned to be cautious about who we do business with.

[Edited at 2013-05-22 12:14 GMT]


 

Kuochoe Nikoi  Identity Verified
Ghana
Local time: 21:27
Member (2011)
Japanese to English
Debt agency May 22, 2013

Leah Hallissey wrote:
I did mention to him that I'd been investigating debt collection agencies. For this £165 debt, I've been quoted £40 if the agency pays, otherwise no fees.

Go for it. The worst thing about chasing late/no payments (IMO) is the stress and hassle involved. Let the agency handle things and turn your focus to more profitable affairs.


 

Dr. Andrew Frankland  Identity Verified
Spain
Local time: 23:27
Member (2007)
English
+ ...
Small claims court May 22, 2013

As both you and your client are based in the UK, I suggest trying the small claims court. You can prepare all the documentation on-line and the threat of an outstanding County Court judgement against the client is often enough to get them to pay without having to even submit the documentation to the court (just tell the client that if you're not paid by a certain date you will start proceedings). It should also be cheaper than using a collection agency and, assuming the court finds in yuor favour, you can claim legal expenses and add punitive interest to the debt.

Good luck,

Andy


 

Tom in London
United Kingdom
Local time: 22:27
Member (2008)
Italian to English
FIrst things first May 22, 2013

Before you go down the debt collection agency route, try the Blue Board route. Skilfully used, I have found the BB a very good means of persuading recalcitrant clients to pay up. But a certain amount of care is required.

In one recent case, discussed in these forums, the translator activated the BB method in the afternoon and had been paid in full within an hour.

That particular discussion is here:

http://www.proz.com/forum/money_matters/248053-project_still_not_approved_no_payment.html

PS I would avoid the Small Claims Court. Apart from all the hassle, you may not get paid anyway. See this article in the "Guardian": http://www.guardian.co.uk/money/2010/nov/20/small-claims-court-enforce-judgment

[Edited at 2013-05-22 13:00 GMT]

[Edited at 2013-05-22 13:07 GMT]


 

Marie-Helene Dubois  Identity Verified
Spain
Local time: 23:27
Spanish to English
+ ...
In this case I would go with the debt collection agency May 22, 2013

to avoid hassle.

If you ever (heaven forbid) have any debts of over 750 pounds, a winding up notice is a good strategy (or at least suggesting that this is the route you will take) but to be honest, for 165 quid, I'd be inclined to pay the 40 and get 125.

The small claims court is a really good option but if the whole process is going to take more than 2 hours of your time, it's probably more economically sound to pay 40 pounds and let someone else do it because 2 hours of your time is worth more than that.

Perhaps it would help if you send them a recorded delivery letter stating that it is the final demand for payment and that if you haven't received the funds in your account within 7 working days, you will be taking further action.
This might stimulate them into paying just to get you off their back. I find it hard to believe that a company doesn't have 165 quid in the petty cash and/or that a client not paying would mean that they are unable to pay such an amount.
Surely they have other clients. This smacks of an excuse to me.
As you quite rightly say, their cash flow is their business, not yours. I don't think that a company that doesn't have 200 pounds in the float is much of a company.

The likelihood is that you will eventually get paid by this company but you don't really need the hassle.


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:27
Member (2007)
English
+ ...
Act quickly May 22, 2013

Whether you decide to go the Small Claims Court or debt recovery company route, you need to act quickly as there will be plenty of creditors out there. The first thing to do is to check they're still solvent, and I believe that the registers of Companies House are available online. You either need to check regularly or set up an alert if that's possible. There is absolutely nothing that can be done by the courts once the company has filed, and probably nothing legal a debt recovery company can do, either. If it is insolvent, there will be procedures to follow to make sure your claim joins the queue, but don't hold your breath as you'll quite likely not see a penny: I've had it happen twice, and each time the coffers were dry.icon_frown.gif

If they aren't insolvent, just experiencing some cash-flow problems, either way should work. With the debt recovery company, you'll likely get your £125 fairly quickly, if you get anything, as the company will want to act fast. The courts will take longer, but you will get every last penny, plus interest, plus your court expenses as well as the ex-client's will be added to the debt. I believe that for straightforward cases of refusal to pay an invoice, there is almost no chance of the court rejecting your claim. Knowing that the client ends up paying out 150+% of the invoice amount is actually quite a nice feeling, believe me! I've been there!icon_biggrin.gif


 

Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 23:27
English to Polish
+ ...
+1 May 22, 2013

TransAfrique wrote:

Leah Hallissey wrote:
I did mention to him that I'd been investigating debt collection agencies. For this £165 debt, I've been quoted £40 if the agency pays, otherwise no fees.

Go for it. The worst thing about chasing late/no payments (IMO) is the stress and hassle involved. Let the agency handle things and turn your focus to more profitable affairs.


+1. It's a time function. For £40, I'd cringe at the thought of the fine 18-year-old Chivas Regal thus forsworn, but at same time I could probably make more in the time I'd need to spend banging on the non-payer's door. Just like the debt collector would prefer to be collecting debts rather than relying on his school German.


 

Leah Hunt
United Kingdom
Local time: 22:27
German to English
TOPIC STARTER
Thank you! May 22, 2013

Thank you everyone for your advice, I really do appreciate it.

I'm now planning to issue a final letter/email asking for payment within 7 days. Failing that I'll take a look at the small claims court and weigh it up against the debt collection route for time/financial costs.

I agree that it seems mad that this company can't afford even one of my small invoices!

I'll update on here if I get anywhere in case it'll help people in the future.


 

Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 23:27
English to Polish
+ ...
A visit to the court is always a piece of continued education, innit? May 23, 2013

Leah Hallissey wrote:

Thank you everyone for your advice, I really do appreciate it.

I'm now planning to issue a final letter/email asking for payment within 7 days. Failing that I'll take a look at the small claims court and weigh it up against the debt collection route for time/financial costs.

I agree that it seems mad that this company can't afford even one of my small invoices!

I'll update on here if I get anywhere in case it'll help people in the future.


 


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